For those of you who may have bought any property on Lease option basis, is there any” catch” you have found or been uncomfortable with?
2/ What happens if th Tenant decides not to proceed- do they get their equity back in full or is it forfeited? Would be severe if the latter. i can understand the option monies being forfeited, but the weekly equity contribution??
3/Is there any place to find Investors willing to invest/ engage in T/O? I am looking to go into T/O as buyer.
4/ Do you find investors reluctant to get into established/old prooperty rathe than new homes?
5/ Any advise for any WATCHOUTS to observe, if I were to go into T/O operation? Many thanks.PiperHi Piper
Tenants usually do not have any equity, if they chose to go ahead then they often get discounts, but they don’t own or have any rights to this if they do not proceed – usually.
If you are looking for a LO as a tenant, have a look in your local paper, and/or sites like this.
It seems that LOs occur more often on the cheaper type of property rather than expensive.
Watch out for little things in the contract, eg. getting behind in your rent by more than x days could void your option. So get your solicitor to go thru it with you.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
The advantage of lease option agreements is there are no specific rules – because every circumstance is different.
Aside from general provisions which protect both/all parties, an LO is often structured in accordance with what the parties have ageed too.
The only “WATCHOUT” is not employing a qualified lawyer.
— Michael
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